Fast Audis are a conundrum if you place an emphasis on driving satisfaction. Their showroom appeal can't be underestimated since they always look good and the build quality is practically bombproof, but the dynamics can be a little hit-or-miss. For every sparkling R8, second-gen TT and B7 RS4 that wins plaudits, there are other S and RS Audis that were spoiled by numb steering, a brittle ride or excessive understeer.

Enter the third-generation S3. It epitomizes the hot hatch formula, even if it costs more than many of its contemporaries. However, Audi feels it's onto a winner by grafting a trunk to the back of the hatchback to create their first ever compact sedan S model.

The good news is that the Sedan is both the best-looking version of the S3 to date and it's coming to America. The design has a real clarity from the moment you first see it, with its squat, hunkered stance, coupe-like profile and sharp lines. It's muscular and taut, and works well in almost any color.

Inside, things get even better. The usual excellent Audi interior is evident and you can load it with a slew of optional equipment, such as adaptive cruise control, active lane assist, a 14-speaker B&O stereo and MMI Navigation Plus. But fortunately, all the basics are flawless, from the fantastic leather front seats to the chunky three-spoke steering wheel, so you could probably keep the sticker price under control.

There's also plenty of space for four adults, even with the driver's chair pushed back, while the trunk is actually bigger with the seats up than in the S3 Sportback.

The S3 Sedan shares its 2.0-liter TFSI engine with the hatchback version, and again, this is a very good thing. Supremely strong throughout the rev range, it delivers meaningful acceleration no matter what speed you're going. The boost delivery is lag-free, and you'll have a hard time remembering it's turbocharged.

The motor has a nice exhaust note, which is augmented by a flap in the exhaust and an electromechanical sound actuator in the bulkhead. Unfortunately, this makes it sound slightly artificial and grates a little. Still, 300hp and a sub-5sec 0-62mph are stats befitting more expensive machines, so we'll cut the S3 Sedan some slack.

We sampled the engine with the S tronic six-speed dual-clutch auto, and while we'd normally make a strong case for a stick shift, the S tronic is such a capable companion for the four-cylinder that it might be the better option...

It only showed slow-witted behavior when coming out of the tightest hairpins and asking for more than 50% throttle. In this situation it took its time to kick down. Otherwise, the trans shifted imperceptibly, emitting an entertaining "pop" from the quad exhaust tips on fast upshifts.

Obviously, the S3 is equipped with quattro all-wheel drive, as well as torque-vectoring, which means you've got seemingly endless grip to put 300hp to the pavement in any conditions. But what really impressed us was the Sedan's entertaining steering. Uninhibited by the huge expectations placed on anything wearing an RS badge, the S3 delivered excellent dynamics.

There are still flaws, chief of which is the steering remains numb unless in the sporty driving modes - the S3 has the mode select switch that allows you to choose from five different setups. These alter throttle response, steering weight, damper rates and S tronic shift speed. However, even in the Dynamic setting the steering remains numb around dead center. Yet it has consistent weight and the S3's nose always reacts to inputs in lightning fashion. We were also happy to discover that understeer was practically eradicated unless you're travelling at extremely high speeds.

The Audi S3's ride quality exhibits a compliance in all areas that many previous S/RS models failed to achieve. It's not only comfortable but keeps the rubber on the road, making the car devastatingly quick when the curves come thick and fast. You find yourself grinning as the S3 encourages you to commit to each bend more than the last. The grip is astonishing in the dry as it scythes through curves and sweepers with aplomb - in the wet, it's going to be peerless.

With great stopping power provided by the ample brakes, the S3 is blessed with a suite of controls that work so well together, this might be one of quattro GmbH's best efforts since the original '80s legend that bore the hallowed name.

The drawback is it doesn't leave much room to maneuver for an impending RS version... and in some ways it's better than all the existing S/RS Audis as well.

With only the Mercedes-Benz CLA45 AMG occupying this rarified performance niche - a car that's even more powerful and expensive - the S3 Sedan has a clear route to success. Although once the next Golf R and BMW M2 arrive, things could get a lot more exciting for this sports sedan.